Swiss Farms: Driving Convenience in Neighborhood Groceries

“If you need to pick up bread, eggs, and a gallon of milk, rather than going to the supermarket, finding a parking spot, getting the kids out of the car seats, and dragging them through the supermarket in a reasonable amount of time, we give you the option of getting your shopping done quickly without getting out of your car,” said Paul Friel, CEO. “And you won’t pay more than you would at a grocery store.”

It’s clear the concept is gaining momentum. Between 2007 and 2008, average sales at each Swiss Farms store increased by $60,000, moving the figure up to $1.6 million. And although there are other drive-thru concepts across the country, what distinguishes a Swiss Farm versus a traditional convenience store is its neighborhood-based personality.

“When we look at real estate acquisitions, we look for high traffic areas,” said Friel. “We want to be on Main & Main, but we also want to be where there are a lot of rooftops and a lot of families.”

Although other retailers can live on car count alone by locating in areas people will pass on their way to work and in industrial settings, Swiss Farms can’t. “We have to be within a few minutes of a neighborhood,” Friel continued. “We’re a neighborhood store and will always be a neighborhood store because of our product mix.”

Efficient supply

Within each Swiss Farms location, shoppers will find milk and dairy items; baked goods; deli products such as bacon, sausage, and hot dogs; drinks and juices; general grocery items such as ketchup, mustard, mayonnaise, and salad dressing; ice cream; frozen goods; soda, water, and energy drinks; prepared foods including pastas, salads, and side dishes; seasonal produce; and snack items.

Each Swiss Farms location turns its inventory three times a week, which means each requires daily deliveries of core products such as milk and teas. “We can react quickly, so we’re always stocked with what our customers want,” said Friel.

Tight inventory management requires efficient supplier strategies, which starts with working with companies that will supply according to each location’s needs. Before developing a relationship with any supplier, Swiss Farms considers how large its footprint is, what its distribution capabilities are, and how effectively the supplier can help the grocer develop private label products.

“We take a customer-focused approach to this and ask what our consumers want—what’s driving them and their decisions,” said Friel. “We look for suppliers who can fulfill those needs across a wide geography.”

Smart sourcing

Swiss Farms began as a family-run business. In 1999, the family sold the dairy to Dean Foods, and in 2003, it sold the retail portion of the business to a group of local investors.

In the next five years, the company hopes to grow its footprint to 100 stores and start spreading into Southern New Jersey. Swiss Farms has started offering franchising opportunities, in part due to franchisee demand and because it will enable the chain to expand faster than with only company-owned locations.

“Brand penetration makes this growth goal appealing, but the economies of scale are also a plus,” said Friel. “We’ll enjoy those benefits while enhancing our footprint.”

When looking at supplier partners, Swiss Farms now considers whether their operations will support franchisees in the same fashion as a multi-unit company-owned system. “We want to make sure they will handle the one- and two-store operations effectively while supporting a larger footprint at the same time,” Friel said.

At the same time, some of Swiss Farms’ products are sourced locally. For its wholesale grocery supplies, the grocer uses AWI, a regional player. For its milk and teas, it uses national distributor Dean Foods, but it also uses vendors that supply items on a local basis, such as Tasty Cake in the Philadelphia market, and a local supplier for eggs.

“We partner with the companies that make sense in the specific market we’re serving,” Friel said. “Our stores are located in neighborhoods, and it’s those neighborhoods we supply for.”

Modern moves

After 40 years of service to its communities, Swiss Farms is changing up its look and feel, starting with a prototype store it opened in November. Unlike the company’s current stores, most of which were built between 1968 and 1975, the new look will be a larger format with four order points in the drive-thru and a customer bypass lane to handle more customers at once.

“One of the issues at our legacy stores is that as we get busy, traffic backs up,” said Friel. “The new store allows our customers to pull up, get their order, and pull out regardless of

if someone is ahead of them.”

On the communications side, Swiss Farms hired Chute Gerdemen out of Columbus, Ohio to help articulate its brand with the new store design. New stores will now have three walls of glass so customers can see inside. But even with the more modern feel, the grocer isn’t letting go of the design elements people have come to love.

“The old barn, Swiss store, and silo will all remain,” said Friel. “We decided to keep those elements in place while designing a modern, fresh building that’s friendly to shop and isn’t intimidating.”

Swiss Farms also expanded its product selection, adding items such as rotisserie chicken and homemade replacements for a quick meal and fresh-baked muffins and breads. “It was a perfect opportunity for us to play to our strength as a fill-in shopping store,” Friel said.

Already, Swiss Farms’ new store design is making waves. At Global Shop, it won the Association of Retail Environments’ global design award. This recognition is just another way Swiss Farms is proving that even after 40 years, improvement is still a possibility.